Bloomberg News

Nordea Cuts Growth Forecast for Norwegian Economy on Turmoil

December 01, 2011

Josiane Kremer

Dec. 1 (Bloomberg) -- Nordea Bank AB lowered its forecast for economic growth in Norway next year and predicted interest rate cuts this month and in March as consumer spending and investments slow.

Norway’s mainland gross domestic product, which excludes oil and shipping, will grow 2.1 percent next year, down from an earlier forecast of 2.5 percent, the largest Nordic lender said today in a report. It will expand 2.9 percent in 2013.

The central bank will cut rates by 0.5 percentage point this month and by 0.25 percentage point in March, from the current 2.25 percent, Nordea said. Unemployment will rise to an average 3.6 percent next year from an average of 3.3 percent this year, the bank forecast.

Policy makers in Oslo in October shelved planned rate increases to the second half of next year because of the turmoil. Governor Oeystein Olsen has said he is ready to cut the benchmark if global growth prospects worsen.

--Editors: Jonas Bergman, Tasneem Brogger

To contact the reporter on this story: Josiane Kremer in Oslo at jkremer4@bloomberg.net

To contact the editor responsible for this story: Tasneem Brogger at tbrogger@bloomberg.net


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